An analysis by the Legislative Analyst’s Office from February of 2004 indicates that the LAO had no confidence in the AOC’s ability in implementing court software including CCMS. In fact, the LAO’s report raised serious concerns about how the projects would be funded with no little to no oversight.
I’m curious what readers of the report thought of the CCMS project when the report was full of section titles like:
Court Not Required to Follow Process Intended To Protect State Against Failed Projects
Court IT Project Process Is Lacking
Court’s IT Project Planning Is Inadequate
Court’s IT Project Development and Implementation Not Fully Developed
Court IT Project Implementation Evaluation Not Required
And the most ominous sounding title:
State’s Financial Exposure Is Potentially Significant
I’m including the full report after the jump but I wanted to highlight one particular section of the report which I think advocates of AOC transparency would find interesting reading. The emphasis on the last sentence is mine.
Court IT Project Implementation Evaluation Not Required.
The state’s IT process requires departments to submit a post implementation evaluation report (PEIR) within 18 months after implementation. This report documents what was expected to be achieved and what was actually achieved by projects. The court’s IT process does not require such information. Consequently, the AOC will be unable to demonstrate whether an implemented project ever achieved the savings, efficiencies, or other benefits as originally intended. In addition, without PIERs, the Legislature cannot determine how much an IT system ultimately cost to develop or how much it will cost to operate and maintain the system on an annual basis.
Analysis of the 2004-05 Budget Bill
Legislative Analyst’s Office
The Trial Court Funding item provides state funds for support of the state’s trial courts. California has 58 trial courts, one in each county. Trial courts hear all criminal cases including felonies, misdemeanors, and traffic matters. They also have jurisdiction over all civil cases including family law, probate, juvenile, and general civil matters. About 8.1 million cases were filed in the trial courts, at some 400 court locations throughout the state during 2000-01 (most recent data available), and over 11,000 jury trials were conducted. The Trial Court Trust Fund is the main funding source for trial court activities.
Chapter 850, Statutes of 1997 (AB 233, Escutia and Pringle)—the Lockyer-Isenberg Trial Court Funding Act of 1997—established the Trial Court Trust Fund to support the operation of the trial courts. This act shifted fiscal responsibility for support of the trial courts from the counties to the state. This measure resulted in a major new financial responsibility for the state’s General Fund and provided general purpose fiscal relief to counties by capping their future financial obligations for court operations. Figure 1 shows the sources of revenue for the Trial Court Trust Fund.
Proposed Spending. The budget proposes total expenditures in 2004-05 of $2.2 billion for support of the Trial Court Funding program, a decrease of $37.1 million, or 1.6 percent, compared to estimated current-year expenditures. General Fund support would increase by $64 million bringing the total proposed General Fund expenditures to $1.1 billion. Figure 2 shows expenditures for the trial courts in the past, current, and budget years.
Significant changes in the Governor’s proposed budget for Trial Court Funding include the following:
- Unallocated Reduction—$59 Million. The budget proposes an unallocated reduction of $59 million. Under this proposal, the Judicial Council would decide how these reductions are allocated to the courts.
- Proposed Augmentations. The 2004-05 Governor’s Budget proposes $2.7 million in augmentations, including $2.6 million for prisoner hearing costs and $165,000 for the court interpreters program. The $2.6 million for prison hearing costs is not an increase in General Fund expenditure for this purpose, rather it is a transfer of General Fund money from the Department of Corrections budget to the State Trial Court Funding budget.
Currently, the courts face management challenges because of their inefficient information technology (IT) systems, specifically, case management and financial systems. The Administrative Office of the Courts (AOC) has begun to develop and implement a statewide case management system and an accounting and reporting system. Both systems are scheduled to be completed by 2009. In this analysis, we provide background information on the technology projects currently underway, identify issues with the court IT development and oversight process, and offer recommendations for improving that process.
Like any modern organization, the courts rely upon IT for many of its core business functions. The courts’ business functions are carried out either manually or through the assistance of its case management systems and accounting and reporting systems. Statewide, the courts’ IT system includes over 70 case management systems and 58 separate accounting and reporting systems.
The courts’ core business functions include processing and managing approximately 8 million filings annually and collecting and reporting on revenues from fines, fees, and filings. Other functions include calendaring hearings, completing quarterly financial reports, and updating systems according to legislative changes.
The courts vary in the quality of IT currently used. For example, court IT systems range from very old and unreliable to relatively new and reliable, depending on the level of investment in the systems by the courts.
The AOC, under the direction of the Judicial Council, has embarked on two major IT projects. These are the Court Accounting and Reporting System (CARS) and the California Case Management System (CCMS). The AOC has begun both projects and expects to fully implement both projects by 2009.
Court Accounting and Reporting System. Currently, many local courts rely on county owned and operated financial and accounting management systems that are not designed to meet state reporting requirements. Consequently, courts must take information provided by the county system and then manually create reports that comply with state requirements. In addition to consuming a significant amount of staff resources, this process of manually “recreating” the reports jeopardizes the quality of the financial data submitted to the state by the courts. According to AOC, the reports ultimately submitted to it by the courts often do not meet generally accepted accounting principles.
The CARS was designed for the courts with the aim of providing the specific accounting data required by the state. Upon full implementation, all courts should be able to easily provide uniform financial reports that meet state reporting requirements as well as professional accounting standards. Under the courts’ technology plan, CARS will be fully implemented by 2008. In order to meet this date, CARS will need to be implemented in between 11 and 13 court systems each year. At the time this analysis was prepared, one court system—Stanislaus—had implemented CARS, and eight courts were in the process of implementing the new system. According to AOC, $6.8 million has been spent to date on CARS-related activities.
The California Case Management System. Case management systems are the mechanism by which court staff calendar, update, and track criminal and civil cases. Currently, the courts have over 70 separate case management systems that vary in both reliability and capability. Many courts face management and operational issues, including high maintenance costs, inefficient use of clerks, and difficulties in making legislative changes to the system. According to AOC, the courts pay varying amounts of money to vendors for similar maintenance and updates of their case management systems.
The CCMS will be a statewide-integrated system owned by the courts. The CCMS will integrate traffic, civil, and criminal case management information. According to AOC, the new system should decrease maintenance costs, and increase efficiency by giving judges and court staff more timely access to files. It is our understanding that to date, AOC has (1) expended $25.6 million on CCMS-related expenses; (2) awarded a contract to have the civil, small claims, and probate case management system designed; and (3) will implement the criminal and traffic case management system in the current year in two courts. Under the court’s technology plan, the CCMS will be fully implemented by 2009.
Based on our discussions with trial court administrators in several court systems, as well as discussions with Judicial Council staff regarding the IT challenges facing the courts, we believe there is adequate justification for replacement of the existing case management and accounting systems. However, our analysis finds that the project development and oversight process used for CCMS and CARS (1) lacks an assessment of the statewide costs and benefits of the projects and (2) does not sufficiently mitigate risks common to large IT projects. Accordingly, we make several recommendations for improving the AOC’s IT process in general and its CCMS and CARS in particular.
In order to mitigate the substantial risk involved in major IT projects, California, like most other states, has a process that departments must follow to obtain project approval and funding. The state’s process includes three major components: project planning, project development and implementation, and project implementation evaluation. These components provide the Executive Branch and the Legislature with information on (1) the estimated costs and benefits before the project is approved, (2) a plan for project oversight and risk mitigation while the project is being developed and implemented, and (3) an evaluation of the proposed versus the actual costs and benefits of the project after it is implemented.
The AOC is not required to follow the state’s IT review and oversight process. Thus, it is not required to provide either the Executive Branch or the Legislature any project planning, development, or implementation evaluation information.
Our evaluation of the court’s IT process found significant deficiencies in each of the major IT project process areas: project planning, development, and implementation evaluation. Despite the identified deficiencies in AOC’s IT process, our analysis indicates that AOC, in planning the CARS and CCMS projects, did clearly define the court’s business needs. It also conducted a competitive procurement process for both projects. While these are important steps, these actions do not fully mitigate project risk to the same extent offered through the state process. Below we describe the court’s IT process and discuss its deficiencies as compared to the state’s IT process.
The Court IT Process. Generally, the information technology staff of the AOC assess the IT needs of the individual trial courts, and make recommendations to the Court Technology Advisory Committee (CTAC). The CTAC then evaluates the recommendations and based on its findings, makes recommendations to the Judicial Council. If the council votes to authorize the project, the AOC is able to move forward with the project.
Court’s IT Project Planning Is Inadequate. The state’s IT project planning phase begins with the submittal of a feasibility study report (FSR) for most proposed projects over $250,000. The purpose of an FSR is to define the problems that need to be addressed and lay out alternative solutions that will address the problems. The FSR also identifies each alternative’s estimated costs, quantifiable benefits, and implementation schedule. The information provided in an FSR demonstrates to the administration and the Legislature that the most cost-effective alternative was chosen. The FSR must be completed before a project is considered for funding.
The AOC’s project planning phase does not require the completion of an FSR or anything resembling it. According to AOC, it considered alternatives in regards to CARS. However, AOC staff were not able to provide information on each alternative’s estimated costs, quantifiable benefits, and implementation schedule. In addition, AOC did not consider alternatives in regards to the CCMS. For the reasons mentioned above, AOC cannot demonstrate that it thoroughly considered alternative solutions and made the most cost-effective choice before choosing to embark on CARS and CCMS. Furthermore, in trying to assess the cost-effectiveness of CARS and CCMS we requested cost benefit information for each project. At the time this analysis was prepared, AOC had not provided the requested information.
Based on our discussions with AOC, we concluded that there are no formal requirements as to the level of information on IT projects that must be provided by CTAC to the Judicial Council in order to obtain project approval and funding. For example, the staff is not required to provide a detailed cost-benefit analysis or identify measurable project objectives. Moreover, there are no established standards that require a certain level of project oversight or risk management.
Court’s IT Project Development and Implementation Not Fully Developed. Under the state’s IT process, departments are required to submit a risk mitigation plan and an oversight plan before being allowed to begin implementing a project. The risk mitigation plan considers (1) the potential business disruptions that could occur while implementing the project and (2) the actions the state will take to reduce or “mitigate” those risks. An oversight plan sets up a structure that allows for close review of the project development and implementation—monitoring whether or not the project is on schedule and on budget.
The court did not complete a risk mitigation plan for either CARS or CCMS. Without such a plan, the court may not have fully reduced or mitigated its risk in developing and implementing these projects. For example, risks in these projects may include insufficient funds available to complete the project, the vendor not delivering components when promised, and personnel needing extra training to learn the new software tools. If these disruptions occur, and AOC does not have a plan to deal with them, it may result in a delayed or failed project.
As regards the oversight plan, AOC has steering committees for CARS and CCMS that are providing oversight for project development and implementation. However, our examination suggests that the steering committees do not have adequate information to do their job effectively. For example, while AOC was able to provide an implementation schedule for both projects, no information was available showing the projected cost of the project at each major phase of implementation. Without such information, we do not believe that AOC’s steering committees will be able to effectively monitor the projects. This places the courts at greater risk for cost overruns, and delays for lack of adequate funding to complete the projects.
Court IT Project Implementation Evaluation Not Required. The state’s IT process requires departments to submit a post implementation evaluation report (PEIR) within 18 months after implementation. This report documents what was expected to be achieved and what was actually achieved by projects. The court’s IT process does not require such information. Consequently, the AOC will be unable to demonstrate whether an implemented project ever achieved the savings, efficiencies, or other benefits as originally intended. In addition, without PIERs, the Legislature cannot determine how much an IT system ultimately cost to develop or how much it will cost to operate and maintain the system on an annual basis.
State’s Financial Exposure Is Potentially Significant. At the time this analysis was prepared, AOC could not provide information on the total cost of the projects. According to AOC staff, to date it has spent $32.4 million on CARS and CCMS for project development contracts and implementation in one court. The total projected cost is unknown. Based on the AOC implementation plan, the IT systems will continue to be rolled out in 2004-05. However, AOC could not say how the projects will be funded in the 2004-05 Governor’s Budget, and in subsequent years. The AOC staff indicates that the projects will likely be funded by the General Fund and special funds. Although the AOC could not provide an estimate of the total cost of the projects, based on the information we have to date, we expect the projects could cost up to several tens of millions of dollars more. We believe the state’s financial exposure is potentially significant given the court IT process issues we identify in this analysis.
The deficiencies identified in the AOC’s IT process and the lack of information provided on CARS and CCMS place the state at risk of spending more money than necessary, abandoning a project too late, and/or being unable to demonstrate the success or failure of implementing the project. For these reasons, we believe the court should be required to use the state’s IT process. This would mean that the Judiciary would follow the state’s IT process for project planning, development and implementation, and evaluation. This will ensure that future IT projects demonstrate need, justify expenditures, mitigate risk, and ensure cost-effectiveness. Additionally, it will enhance legislative and court oversight.
We believe that requiring the court to use the state’s IT project development and approval process is preferable to allowing the court to develop its own separate process. Much of the state’s project review and oversight activities are specifically designed to ensure that IT projects are appropriately funded and managed to prevent project failures. Over the last year, the state has implemented an improved oversight process that rates IT projects on overall risk and requires specific project and risk management activities to occur on all IT projects. The intent of this new process is to prevent and detect common problems such as schedule slippage and cost overruns on state IT projects. By including court IT projects under the state’s oversight and review process, the Legislature would have greater confidence that the court’s projects are being monitored to ensure proper project and risk management activities are occurring. Even though the state process adds additional workload for a department, we believe the extra oversight and review increases the overall likelihood that the projects will be successfully developed and implemented.
Analyst’s Recommendation. Given the investment to date and the potentially significant financial exposure to the state of CARS and CCMS, we recommend that the Legislature adopt trailer bill language requiring that the AOC use the state’s IT process. Additionally, we recommend that the Legislature adopt budget bill language requiring AOC to develop and implement a risk mitigation and oversight plan for both CARS and CCMS and submit this plan to the Joint Legislative Budget Committee and fiscal committees before spending additional money for these projects. The following budget bill language is consistent with this recommendation:
0450-101-0932 Provision X. Prior to the expenditure of additional funds for the Court Accounting and Reporting System (CARS) and the California Case Management System (CCMS), the Administrative Office of the Courts (AOC) shall develop and implement a risk mitigation and oversight plan for both information technology (IT) projects. The AOC shall follow the state’s IT requirements in developing the risk mitigation and oversight plan and submit both plans by January 15, 2005 to the chairpersons of the committees in each house of the Legislature that consider appropriations and the budget, and the Chair of the Joint Legislative Budget Committee.
Finally, we further recommend that AOC be required to report at budget hearings on the estimated total cost and quantifiable benefits of the CARS and CCMS and its plan on how these projects will be funded.